Oilman Jim's Letter - 25 February 2024

Interesting news from a number of companies last week. Reconnaissance Energy Africa (RECO.V RECAF 0XD.F) announced an operations update for PEL 73, Namibia. All surveying activity and de-mining activities have been completed on the Damara Fold Belt Prospect L, which is expected to be the company's first drilling location with an expected spud date in June 2024; RECAF is in the process of tendering all required equipment and services associated with the multi-well drilling campaign which is expected to see back-to-back wells in the Damara Fold Belt. Follow-up drilling is expected to be either Prospect M or Prospect P and both locations are being prepared for drilling operations. A revised report from Netherland, Sewell & Associates is expected to be issued next month. In the Rift play, the company has decided to undertake an additional phase of tight grid 2D seismic activity to more clearly image the prospects ahead of drilling and the target for the first Rift well is in the first half of 2025. RECAF continues to progress the joint venture process and if a farm-out is completed, the company expects the successful bidder to participate in the drilling of the Damara Fold Belt Prospect L this year.

88 Energy (88E.AX EEENF 88E.L POQ.F) announced that a 20% working interest in PEL 93, Namibia has been successfully transferred to the company as part of Stage 1 of a three-stage farm-in agreement following approval by the Namibian Ministry of Mines and Energy. PEL 93 is a 18,500 square kilometres onshore acreage position comprising blocks 1717 and 1817 in the Owambo Basin, Namibia. The licence comprises an extensive lead portfolio, with ten independent structural closures identified from a range of geophysical and geochemical techniques and potential for more leads to be identified as the dataset is expanded. Seismic acquisition is planned for mid-2024 with a potential initial exploration well targeting the Damara play in H2 2025.

Sintana Energy (SEI.V SEUSF) announced that it has been ranked #1 Energy Company on the 2024 TSX Venture 50 List amid major light oil discoveries in Namibia's Orange Basin. The company says that its entry into Namibia in Q1 2022 positioned it at the centre of the world’s next great emerging hydrocarbon province. Since then, over 11 billion barrels of original-oil-in-place have been discovered by TotalEnergies and Shell in offshore exploration blocks in the Orange Basin that are directly adjacent to those in which Sintana Energy maintains an indirect interest. Last month, the company announced two significant light oil discoveries in the Mopane-1X exploration well in which Sintana has an indirect interest. These new discoveries underscore the region’s vast potential, with resources estimated at up to 10 billion barrels of original-oil-in-place in the Mopane prospect alone. The finds are part of initial exploration efforts within PEL 83 and are among multiple blocks in which Sintana holds indirect carried interests.

Pulsar Helium (PLSR.V PSRHF Y3K.F) announced that drilling of the Jetstream #1 appraisal well at the Topaz helium project in Minnesota is ongoing and total depth has not yet been reached. The drill time is longer than anticipated due to drilling fluid losses and the company has made the decision to pivot from drilling with water, to drilling with air. An air package has been mobilised that will be connected to the contracted drill rig. The Jetstream #1 well is still anticipated to reach total depth, be tested with a comprehensive suite of open-hole wireline logs and be completed by the first week of March. Demonstrating their confidence, the directors have accepted fees of C$120,000 in shares.

Finder Energy (FDR.AX) announced that it has been granted a 3 year suspension and extension of the primary term of WA-547-P, which is 100% owned by the company and located in the prolific Dorado play trend in the Northern Carnarvon Basin, offshore Western Australia. Finder has identified three large prospects (Brees, Favre and Brady) with combined 2U (P50) prospective resource potential of over 500 million barrels of recoverable oil. The company is seeking a farm-out partner to fund exploration activity to test the prospectivity it has identified in WA-547-P and says it now will ramp up marketing of its Australian farm-out opportunities in WA-547-P, as well as the Gem Prospect in AC/P 61.

Arrow Exploration (AXL.V AXL.L C1JT.F) announced an activity update on the Tapir Block in the Llanos Basin of Colombia. The CN-4 well was spud on January 17, 2024 and reached target depth on January 27, 2024, drilled to a total measured depth of 9,552 feet. The well initiated production with a flow rate of 780 barrels of fluid per day and after recovery of the drilling and completion fluids, in a 12 hour production period the well produced 758 barrels of oil per day. The CN-5 well was spud on February 8, 2024 to test the Carrizales Noroeste prospect and reached total depth of 9,050 feet true vertical depth on February 14, 2024. The company expects to complete the well for production over the next few weeks. The CN-6 well will spud once the CN-5 well is on production. Work continues on the construction of the Carrizales Norte Horizontal Pad, the Matteguafa Attic pad and the Baquiano road and pad. Arrow expects to bring in a second rig for deployment at the Carrizales Norte pad and a third rig for use at the Matteguafa Attic pad.  The company expects the first horizontal well will be spud in Q2. Arrow continues to have a strong balance sheet, with no debt and over US$13 million in the bank at February 15, 2024.

Invictus Energy (IVZ.AX IVCTF) announced that Mukuyu has been estimated to be the second largest discovery made in Sub-Saharan Africa in 2023 by global energy research firm Wood Mackenzie. Mukuyu’s placing as an estimated 230 million barrels of oil equivalent (1.3 trillion cubic feet) resource follows two gas discoveries from the Upper and Lower Angwa reservoirs declared by Invictus in December 2023. Per IVZ’s Managing Director, there remains substantial upside through further drilling to convert prospective resources in the Mukuyu field into contingent resources and subsequently mature them to reserves. Additionally, Invictus’ 360,000 hectare position in the Cabora Bassa basin provides the company with further opportunities to deliver subsequent discoveries from its substantial portfolio of drill-ready prospects and leads following the basin opening discoveries delivered from the first two wells.

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